Bloody bad for business

Violent crime, fuelled by unemployment, is raging in South Africa - deterring the very investment which might solve the problem, writes Alex Duval Smith

"YOU CERTAINLY do not want to send people to South Africa only to have them repatriated in body bags. It is definitely a turn-off," said Tony Twine, an economist reflecting on the impact of crime on foreign investment. He was speaking last Tuesday, shortly after a prominent South Korean businessman had been shot dead in Johannesburg.

"The statistics show that there has been a reduction or stabilisation in most serious crimes," said President Nelson Mandela on Friday when he addressed parliament in Cape Town. But the gallery seat reserved for James Bartleman, the Canadian high commissioner, was empty. He was in hospital with bruises and a broken nose after being mugged in his hotel.

South Africa is once again grappling with what sometimes seems like an awful punishment for its peaceful transition from apartheid state to multi- ethnic "Rainbow Nation". Just when the young democracy most needs the world's tourists and investors, it is labelled crime centre of the world.

Reliable statistics do not really exist but the African National Congress government is alarmed. It has tightened bail and parole conditions and clamped down on crime syndicates.

It desperately wants to remove the crime label and is considering legislation to curb drug-related money-laundering, another major problem since the country's borders opened up at the end of apartheid.

Willie Hofmeyr, a member of parliament's justice committee, said: "Statistics show we are getting crime under control and starting to turn the tide. Crime was a big problem before 1994 [when the ANC came to power]. It was just less visible, in that it was mainly confined to African and coloured areas.

"With the coming of democratic society, crime democratised along with it. It started affecting middle class and more prominent people, not only whites. We often forget that Cape Town was the murder capital of the world throughout the 1980s."

Yet a confidential South African Police Service overview of crime, leaked to the press last December, concluded that the police was in a state of virtual anarchy, as a result of corruption, mismanagement and a lack of financial, material and human resources. It warned that the country could descend into chaos if current tendencies persisted.

Cape Town was known briefly in the early 1990s as EsCape Town, because it was seen as safer than Johannesburg. The tag is used no longer. The sprawling Cape Flats, shanty town dwellings inland from the imposing city by the Cape of Good Hope, are home to powerful drug gangs which have recently reinvented themselves as "Jihad" fighters.

One such group, Muslims Against Global Oppression, is believed to have been responsible for the bombing on 25 August last year of the Planet Hollywood restaurant in the sedate Waterfront area. The attack, which killed two men and maimed five members of the Giddings family from Hampshire, was claimed to have been in retaliation for American air strikes against Sudan and Afghanistan after its Nairobi embassy was destroyed in a blast . There have been many incidents since then, including a shooting during a demonstration against Tony Blair's visit last month.

Most of South Africa's crime is related to the country's high unemployment rate. Tony Leon, leader of the opposition Democratic Party, said: "Twenty thousand South African crime victims who are not as well known as the Daewoo executive or the Canadian high commissioner would agree that the right to life is fundamental and that it has become compromised since the ANC took office in 1994. We have not only gutted the police force of good people but we have allowed 500,000 people to join unemployment queues."

Whatever the causes of the crime, their diagnosis comes too late for Kwon Yong-koo, 50-year-old president of Daewoo, who was shot dead in his car in Morningside Manor, Johannesburg, last week.

The murder - which may have been a failed car hijacking or a contract killing - prompted the Samsung and LG Groups to call on their expatriate staff to stay at home after dark. It also prompted Richard Newby, a director of Daewoo, one of the world's largest electronics and car manufacturers, to warn: "This is the worst thing to happen to South Africa. Hopefully the government will now do something about crime. We cannot tolerate crime any longer." Thirteen large Korean concerns have bases in Johannesburg and investments worth about $100m (pounds 61m).

BMW issued a similar warning last year, when it opened a car plant near Johannesburg. "Daily reports appear in our press of tourists and foreign businessmen suffering from acts of criminal elements in this country. These reports do not go unnoticed," said Bernd Pischetsrieder, former chairman of the German car giant.

In August 1996, Erich Ellmer, the German finance manager of AEG electronics, was murdered in an attempted car-jacking in Johannesburg. Earlier the same year, after Lebanon's charge d'affaires, Charbel Stephan, was burgled twice in 10 days, he memorably told the press that he would be safer in Beirut. "Johannesburg is a jungle. The problem in Beirut is political, not criminal. We don't lock our doors in Beirut. I am leaving and I'm not coming back. Maybe my government will send someone more courageous," he said.

Nerves of steel, indeed, are often required in this country, where private guards are hired to guard police stations in some neighbourhoods and schools routinely have high-voltage fences.

Guns and bullet-proof vests are everyday sights. They complement urban landscapes of high walls and razor wire in which human beings devise extraordinary means of protecting their possessions. Currently being advertised is The Blaster, a flame-thrower which can be fitted to most saloon cars and activated in the event of a threatened hijack. Another bizarre invention is The Autoport - a steel cage which can be locked around a vehicle while stationary.

Yet despite all the evidence which would appear to indicate the contrary, people still come to South Africa for the sun or for the cheap labour.

An Austrian delegation is visiting this week to explore business opportunities and South Africa - which makes 4.5 per cent of its gross domestic product from tourism - has just been listed the 25th most visited country in the world, just behind Ireland and ahead of Egypt.

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